City officials planned to issue a notice of default to Yanaguana on Friday, giving the river barge company 30 days to resolve the shortage or risk terminating its contract to operate tourist boats on the San Antonio River.

The final bill, detailed in a memo to the city attorney's office, is about $500,000 more than city officials first estimated Yanaguana owed in outstanding fees.

The bill includes interest compounded monthly since November 1997, when Dreamland Photography took over Yanaguana's souvenir photo venture, and $50,000 in auditor costs. It also includes about $80,000 in unpaid advertising revenue and an additional $1,100 in unpaid commissions from cash drawer overages.

"They have 30 days to respond to our notice of default to our satisfaction, and if they don't within that 30-day window, we have to proceed with any and all remedies available to us under the contract, including possibly termination," Councilman Tim Bannwolf told the San Antonio Express-News in Friday's editions.

Yanaguana owner Carol O'Malley said she was dismayed by the city's latest demand.

"I am totally shocked," she said. "This is the same city staff that has given us approval, after approval, after approval to do everything that was done. Now they've changed their mind and say my company owes $1.5 million that we don't owe."

The river barge company and Dreamland, owned by Dennis O'Malley, Carol O'Malley's husband, are in a legal dispute with the city about photography payments.

Two weeks ago, city officials concluded the two companies are one entity and should remit to the city 49 percent of all gross revenues, including photography, as stated in the contract.

Yanaguana, however, maintains its arrangement with the city calls for San Antonio to receive 49 percent of the 25-centper-passenger fee Dreamland pays the barge company or 12.25 cents per passenger.

Last week, Yanaguana sued the city, asking a state court to resolve the contract dispute and to find that the two companies are separate.

According to the memo, Dreamland earned nearly $3 million between November 1997 and February 2000 by selling souvenir photos to river barge passengers.